Examples of Tax Increases from Surtax

July 20, 2009

The following is a table showing just the surtax amount that tax returns at various adjusted gross income (AGI) levels would be hit with in 2011 under the proposed health care bill in the House. Note that in 2013, the surtax on those with AGI less $1 million ($800,000 for singles) may increase, depending upon the savings from the health care bill.

There appears to be some confusion regarding the marginal tax rate concept, which is the tax imposed on the next dollar of income earned. A marginal tax rate is not the same as an average tax rate. Furthermore, the surtax would not apply to all income. It would only apply to income earned beyond $350,000. If some married couple earns $400,000, they would not pay the 1 percent surtax on the entire $400,000. The couple would only pay surtax on 1 percent of the difference between $400,000 and $350,000, which equals $50,000 x .01, or $500.

AGI Level

Surtax for
Married Return
Surtax for
Single Return
$200,000 0 0
$300,000 0 200
$400,000 500 1,200
$500,000 1,500 2,700
$600,000 3,000 4,200
$700,000 4,500 5,700
$800.000 6,000 7,200
$900,000 7,500 12,600
$1,000,000 9,000 18,000
$1,500,000 36,000 45,000
$2,000,000 63,000 72,000
$5,000,000 225,000 234,000
$10,000,000 495,000 504,000

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